Steel City Re launches a parametric ESG insurance product
Steel City Re, a provider of parametric insurance solutions for reputation risk, has announced the launch of a new environmental, social and governance (ESG) product designed to protect boards.
Pressure from shareholders and the public has propelled ESG issues to the forefront of corporate concerns in recent years, but Steel City Re notes that many set goals without the operational or governance processes in place to make them happen.
Recent litigation has made it clear that both investors and regulators have a right to regard these ESG statements as material and boards of directors are targeted in courts as well as courts of public opinion.
This new solution from Steel City Re is therefore designed to offer payments for a wide range of costs that a company may incur on behalf of the board or individual directors in the pursuit of resilience and restoration of the reputation in the context of ESG issues.
A synthetic reputation value index called the RVM Index is the metric behind Steel City Re’s insurance solutions.
Drawing on an experience base of seven million events, Steel City Re calculates the value of the parametric trigger (s) that best match customer choices.
Both parametric policies pay when the insured’s RVM index value drops below a trigger value for 20 weeks after a publicly recognized adverse ESG event, or more broadly, an ethical event. , innovation, safety, security, sustainability or quality.
“The race to set ever higher ESG targets has made it harder to meet those targets and the risk of failure – often a very public failure – more serious,” said Steel City Re CEO Nir Kossovsky.
“In many cases, ESG has become a central part of corporate reputation and the adequacy of board oversight will put board members in the crosshairs when regulation, investors , rating agencies and the media will be closely scrutinized.